National Defence Committee on May 6th, 2026

[Christiane Fox, Deputy Minister, Department of National Defence]

Thank you very much for the question.

I think that ammunition is absolutely a core capability that we need to advance as quickly as possible. It is part of our 10 focus areas of the defence industrial strategy. We are trying to fast-track as much as we can to increase the ammunition supply. With those investments made, as you noted in your question, we are working with industry to get them as quickly as possible into the hands of the military.

[Heather Sheehy]

I would say that the most recent acceleration that we have done is the $1.4 billion that the minister spoke about, and that is trying to increase the industrial capacity here in Canada in order to advance our ammunition delivery. There was money there for GDOTs and also nitrocellulose. It's a significant investment, and it will allow us to have more domestic capacity, but more needs to be done for sure.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

In the defence industrial strategy, is the Department of National Defence responsible for going out there and doing a survey, an inventory, of what defence companies are out there, which ones have capacity and which ones are being underutilized?

I think about the propellant plant that Magellan has in Stony Mountain, Manitoba, that hasn't been busy with Canadian orders since we quit building the CRV7 rockets. It's one of the biggest footprints for building explosive devices in North America and maybe within NATO.

[Christiane Fox]

Definitely. As part of the defence industrial strategy, industry partnership is one of the pillars, and we have to advance. In doing that, we have to be clear about what capabilities the military needs for our sovereignty and be clear about where Canada has potential opportunity, both domestically and in export markets, so we are having those discussions with industry to have a greater sense of what they can produce but also for us to be sharing information about what we need so there's greater clarity. I would say that's not limited to industry. I think it's something that we have to do with academia as well and in the R and D space, because it is about all of those pieces coming together.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

We are talking about building at speeds not seen since World War II. That's what the government likes to throw around. We haven't seen any major increases in defence procurement or production over the last decade. How do we go about ensuring that things are actually getting built? Is the Department of National Defence now writing contracts?

We talked about how we're finally getting 70,000 new rifles. The Danes are ahead of us. They ordered 50,000. They'll get their C8s before we get ours.

Are we going to actually get contracts out there now to ensure that the Canadian Armed Forces have the kit they need?

[Christiane Fox]

Absolutely. It is about having a good sense of what the production capability is here in Canada at the moment. It's also about exploring opportunities in the context of build-partner-buy. If we identify a supplier that could produce in Canada, that's also part of our reflections in terms of ensuring that we increase productivity.

We have some procurements that we're doing through the defence industrial strategy. Those are things that we're doing at defence. There are also things that our regional development agencies are doing with small and medium-sized businesses across the country.

[The Chair, Liberal, Charles Sousa]

I'm sorry. I have to stop you there.

I should have clarified that Deputy Minister Christiane Fox is here replacing the minister in the second half of this question portion.

Mr. Bezan, your six minutes are done.

I'm going over to Sherry Romanado.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

Thank you very much, Mr. Chair.

Through you, I'd like to thank the witnesses for being here today.

This is on two issues.

We heard a bit about how SMEs get through the door. We heard that a little earlier. In my riding, for instance, we held an all-day seminar with local businesses to say this is the defence industrial strategy, this is what we're looking for and this is how they can partner with Canada to address some of the needs that we have. Could you elaborate a bit on that?

Deputy Minister, you alluded to that regarding academia. One of the exciting parts of this is the fact that we are going to create what we call a DISH, or a defence innovation support hub. We're asking SMEs, companies, academic researchers and the Canadian Armed Forces to collaborate in a secure location to come up with solutions to some of the issues we have, whether they be a product or problem-solving. I think this is the first time we are bringing all of these three pillars together to do that.

Can you elaborate a bit on that? That's how some SMEs might be able to be part of the solution.

[Christiane Fox]

Engagement with SMEs is absolutely key. There was a lot of engagement pre-DIS in order to get a sense of how people wanted to get involved and for us to communicate some of the capability requirements we were looking for. I would say there are a number of ways that we can engage SMEs across the country.

There is engagement through the BDC and the investment that's going into the BDC for them to get some financing to allow them to develop their ideas and products. Our regional development agencies can target specific small and medium-sized businesses so that we have a good distribution across the country. We're seeing examples of that with PacifiCan investing in the University of British Columbia and some SMEs to come together on quantum and other things that are listed as our capabilities.

You mentioned the DISHs. They're a great example. The maritime one can bring together Dalhousie University with a small sized business that is working on sensors, for instance, which will help our navy and Coast Guard be able to develop.

The final point I would make is around the importance of ensuring, as we talk to the bigger industry players about our expectations around that Canadian supply chain, that our messages are clear about the need to engage small and medium-sized businesses in what they put forward for their procurement strategies.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

That's fantastic.

Most members around this table probably know that CANSEC will be happening at the end of May here in Ottawa. I've been suggesting to a lot of small businesses that they come to CANSEC and speak to others to see if they can find some opportunities to sell their wares and become part of those supply chains. That's something we've been recommending a lot.

We heard a little earlier some questions about articles that my colleague brought up. I think there was some confusion about an article that referenced the AWACS versus the question about the CF-18 replacement jet.

Could you please explain and make sure that everyone understands that the AWACS is definitely not the fighter jet replacement? Could you make sure that everyone knows what we're doing in those two projects?

[Christiane Fox]

For the fighter jet capability, I would confirm that is still under review, so the government will review and make decisions.

The airborne early warning and control aircraft is the sixth generation. This has been a plan as part of our future planning of what our military capabilities need to be. There is a reflection on how over the next 20 years we can advance the airborne early warning and control aircraft. There are some preliminary reflections on the capabilities and industry engagement to have a good sense of what various platforms will offer. That work continues. It is in fact separate from the fighter jet.

Thank you.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

I know there were some questions on whether or not we've actually seen anything happen, as my colleague was referencing. The submarine procurement project is a clear demonstration of our capacity to move quickly and to get the necessary equipment that we need.

In terms of whatever product we decide to choose in making sure the navy has what they need, could you elaborate on how that will help local businesses and economic drivers here in Canada?

[Christiane Fox]

Absolutely. I can start and then my colleague Heather may want to jump in.

The down selection to two allowed us to really focus on ensuring that we had the number one requirement in the case of the subs for our navy, which is the capabilities, and ensuring that both platforms could respond to those needs.

Then it allows us to really work on ensuring Canadian content and Canadian suppliers as we look at the merits and the benefits in making our selection. That economic benefit is weighted quite heavily in the context of the supply chain and activity in Canada. We were able to demonstrate a different process to move faster to allow us to get to a place where we are reviewing bids, we're looking at what the benefits are for Canada and we're maximizing those discussions.

Heather, is there anything else you want to add?

[Heather Sheehy]

In addition to the purchase of the submarines—and we've been quite forthcoming in terms of our interest in having economic benefits in Canada as part of that procurement—let's not forget about the in-service support and the maintenance. We've been clear that we want to have that capability in Canada. That actually aligns very closely to the defence industrial strategy, which has in-service support and maintenance as one of the sovereign capabilities. In addition to the actual purchase, we are looking at that in Canada as well.

[The Chair, Liberal, Charles Sousa]

Thank you both.

Mr. Savard-Tremblay, we'll go over to you for six minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

Ms. Fox, if you don't mind, let's now discuss the export component mentioned in Canada's defence industrial strategy.

One of the objectives is to increase Canada's military exports by 50%. Currently, we know that nearly 69% of exports go to the United States. It is our main partner. It's actually enormous. Canada is even the only country with national supplier status in the United States. Consequently, Canada automatically grants export licences to the United States.

We discussed this recently; there was a bill that likely had too many flaws, but the intention was still to highlight a certain lack of oversight and monitoring regarding humanitarian considerations, which allowed for the authorization of arms exports to several countries without the ability to know exactly where they were going and without any oversight whatsoever due to U.S. control over the matter.

Is there a strategy to find a way to reconcile this with peace objectives and to ensure that these weapons don't fall into the hands of declared adversaries or countries and regimes officially condemned by Canada?

[Christiane Fox]

That's a very good question. Thank you.

We are working closely with Global Affairs Canada to ensure that we have an arms export system that takes into account our export objectives, but also the importance of peace objectives, as you noted. There is work that will need to be done with our colleagues. We offer our advice, but the decisions ultimately rest with the Department of Foreign Affairs.

However, I believe it is necessary for our sovereignty to diversify our exports. As a member of NATO, we have partners among the Arctic nations, with whom we have an opportunity to diversify our exports.

So, this is something we are looking at closely. We really need to focus on the work of our defence attachés and the work of international trade advisers. We are working closely together to refine our response to these challenges and to ensure that we achieve export diversification. That's the goal.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

I'd still like to ask you how we can find that out. What can we actually do? What kind of system could we put in place to improve tracking? It doesn't seem easy to track where a weapon ends up.

[Christiane Fox]

I'm not an expert in this area. Our colleagues at Global Affairs Canada would likely be better suited to answer these questions.

That said, we have measures in place to assess our partners and their conduct on the international stage, which gives us a certain level of confidence.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

Unless someone else here is somewhat familiar with the issue, this will indeed need to be verified.

I have another example. In 2022, 18.6% of arms exports went to Saudi Arabia. We know that this is not a country that respects human rights; that much is clear. Yet we are talking about increasing exports. Isn't there a danger here?

[Christiane Fox]

As I mentioned, this also involves increasing our exports and working with partners such as the Arctic nations, NATO countries and new partners in the Indo-Pacific region.

We still have a responsibility to ensure that the arms export system is robust and reliable. We will continue this work and we will review opportunities to export arms on a case-by-case basis.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

A review of Canada's defence industrial strategy reveals that the government has several objectives. These include “raise maritime fleet serviceability to 75 per cent, land fleets to 80 per cent, and aerospace fleets to 85 per cent.” According to a report from the Department of National Defence, in 2023, 55% of aircraft, 54% of ships and 46% of army equipment were inoperable. That was three years ago, not ten.

The goal is ambitious, to say the least. Is there a timeline?

[Christiane Fox]

We hope to reach the targets of 75%, 80%, and 85% over the next ten years. We will track the progress made over the next ten years.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

An internal audit of the Department of National Defence carried out in December 2025 found that even straightforward and relatively simple projects took an average of 10 years from identification through to completion.

You're saying here that the goal is to drastically increase the percentages in 10 years. Given that a simple project can take 10 years, how can we quickly improve equipment serviceability in this time frame?

[Christiane Fox]

Depending on the service, the strategy will change. I think that the objective of the Canada's defence industrial strategy is first to facilitate and accelerate procurement and then to assess the capabilities needed in Canada, such as service and support. Apart from this, the goal is to ensure that we meet the deadlines set out in the strategy.